In Tracing Romney’s Role at Bain, a Convoluted Timeline

When Mitt Romney was running for governor of Massachusetts a decade ago, Democrats went before a state commission to demand that he be struck from the ballot. Their argument: After taking over the Winter Olympics in Salt Lake City, he had ceased to live and work in Massachusetts, the state where he had built Bain Capital into one of the leading private equity firms in the world.

Mr. Romney’s team was just as insistent in arguing the opposite. For 30 years, his lawyer argued, “the center of his social, civic and business life has been in this commonwealth.”

Now, amid the heat of the presidential campaign and unrelenting attacks from Democrats over Mr. Romney’s tenure at Bain, the three-year sojourn in Utah has again become the source of controversy — but with the positions reversed.

President Obama and the Democrats are questioning whether Mr. Romney really left Bain in February 1999, when he took over the Olympics. And Mr. Romney and the Republicans are insisting that he ended his day-to-day management role at Bain after taking the Olympics job.

At stake is whether Democrats can hold Mr. Romney responsible for a series of now-controversial investments Bain made during the period in question, including in companies that specialized in outsourcing, laid off some of their workers or declared bankruptcy.

Mr. Romney faced a barrage of attacks over the issue on Sunday, as well as new demands, even from Republicans, that he release more tax returns. Democrats have seized on Mr. Romney’s Bain ties as a test of his credibility, suggesting that he is evading responsibility for his leadership of Bain.

The attacks have thrust Mr. Romney’s three-year leave to the center of the presidential campaign, questioning a central component of Mr. Romney’s case for election — that his business experience gives him the experience to steer the economy on the right course — while putting his campaign on the defensive when it could be attacking Mr. Obama’s job record.

On Sunday, Ed Gillespie, a senior adviser to Mr. Romney, told CNN that the candidate had “retired retroactively” from Bain more than two years after leaving in 1999, an example of how the complexity of Mr. Romney’s business has proved difficult to explain in the simple terms favored by political campaigns.

The complications arise in part from the ways in which Bain was organized. When Bain Capital was originally created, Mr. Romney was given full control of the private equity firm’s new management company, Bain Capital Inc. When Mr. Romney went on leave in 1999, he retained ownership of that entity — and with it, in theory at least, the power to control Bain Capital’s funds.

At the time, Mr. Romney appeared to be leaving open the possibility that he would return to Bain. His leave was originally characterized as part time, and he told The Boston Herald in 1999 that he would be providing input on investment and personnel decisions in his absence.

Campaign and company officials now say that the Olympics job quickly became all-consuming and that Mr. Romney delegated his management powers to the active partners, most of them longtime friends and colleagues. And in recent years, Mr. Romney has been far more definitive in characterizing his departure.

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“Since Feb. 11, 1999, Mr. Romney has not had any active role with any Bain Capital entity and has not been involved in the operations of any Bain Capital entity in any way,” reads a footnote to Mr. Romney’s most recent federal financial disclosures.

Yet because he retained technical control of Bain Capital’s management and because his wealth remained heavily tied up with the firm, Mr. Romney’s name or signature appears on dozens of documents filed with the Securities and Exchange Commission between February 1999 and August 2001, when he finalized a retirement deal with the active Bain partners and transferred to them his shares of Bain’s management entity.

“Mitt’s name were on the documents as the chief executive and sole owner of the company,” Edward W. Conard, a Bain partner at the time, said during an appearance on MSNBC on Sunday. “And it took several years for us to sort out how to put the management team in place.”

All told, Mr. Romney’s name appears on at least 142 such forms, some of which have been the subject of news coverage in recent days, fueling questions about whether Mr. Romney ever really left. One such form, posted last week by Talking Points Memo, lists Mr. Romney’s “principal occupation” as “managing director” of Bain Capital Investors VI Inc., a private equity fund.

Some of the filings reflect the complex nature of private equity funds: each Bain fund was run by a separate general partnership — one that included all of Bain’s executives — that in turn was legally controlled by Mr. Romney through his management entity.

“It’s a disconnect between the ownership interest and managerial functions,” said Harvey L. Pitt, who served as S.E.C. chairman under President George W. Bush. “When Bain takes positions in public companies, they’re required to show anyone who has an ownership interest that could be the effective equivalent of control. So Romney has to be shown on those filings. If they didn’t show them on those filings, they would have broken the law. But it has nothing to do with who’s actually running Bain Capital.”

Indeed, no evidence has yet emerged that Mr. Romney exercised his powers at Bain after February 1999 or directed the funds’ investments after he left, although his campaign has declined to say if he attended any meetings or had any other contact with Bain during the period. And financial disclosures filed with the Massachusetts ethics commission show that he drew at least $100,000 in 2001 from Bain Capital Inc. — effectively his own till — as a “former executive” and from other Bain entities as a passive general partner.

An offering memorandum to investors in Bain’s seventh private equity fund that was circulated in June 2000 also suggests that Mr. Romney was no longer actively involved in managing firm investments at the time. The memorandum, first published by Fortune, provides background on the “senior private equity investment professionals of Bain Capital.” Eighteen managers are listed; Mr. Romney is not among them.

On another filing with Massachusetts officials, Bain Capital listed all of Bain’s directors and officers for 2001. The form lists Michael F. Goss as “president, managing director and chief financial officer,” along with seventeen other managing directors. Mr. Romney is not among them, suggesting that while he still owned Bain’s management company, he was not an officer of the company.

By August 2001, Mr. Romney had announced that he would not return to Bain Capital. Talk was already swirling about a bid for Massachusetts governor; behind the scenes, Mr. Romney was negotiating his final departure from Bain. Mr. Romney’s partners agreed to pay him a declining portion of the firm’s profits in buyout deals and other businesses for 10 years. The deal, signed in 2002, incorporated a payout formula reflecting his passive role in the firm from February 1999 forward, officials said.

Michael Luo and Kitty Bennett contributed reporting.

A version of this article appears in print on July 16, 2012, on Page A10 of the New York edition with the headline: When Did Romney Step Back From Bain? It’s Complicated, Filings Suggest. Order Reprints|Today's Paper|Subscribe